What is Transition to Retirement?

Want to start slowing down but not quite ready to say your final goodbye to the job yet? You can cut back at work and begin to access the benefits of your super in the years leading up to retirement with a Transition to Retirement (TTR) strategy.

This strategy allows you to deposit some of your super savings into an income account as a transition to retirement member. You can then start receiving regular payments from this account, helping make up the difference in your salary from your reduced work hours.

Meanwhile, because you’re still working, your super account will continue to receive employer contributions and any voluntary contributions you make.

Watch this short video to learn about how Transition to Retirement works:

You must transfer a minimum of $30,000 to open an income account as a transition to retirement member in Qantas Super.

However, it’s important to note that there’s a limit on how much you can transfer into an income account once you become a retirement member. This is because the government has set a lifetime limit on how much super members can transfer from the ‘accumulation phase’, or a super account, to the ‘retirement phase’, or an income account as a retirement member.

This is called the ‘transfer balance cap’. The general transfer balance cap was indexed to $1.7 million on 1 July 2021, however the indexation means that there’s now no single cap that applies to all individuals. Instead, the Australian Taxation Office (ATO) explains that each individual has their own personal transfer balance cap between $1.6 – 1.7 million, depending on their circumstances.

You can choose to invest the balance of your income account in the same options as your super account, or choose a new mix of options.

To help you stick to your budget, you can choose to receive weekly, fortnightly, monthly, half-yearly, or yearly payments. Your payments will be sent directly to your nominated bank account.

However, minimum and maximum drawdown limits apply. You must withdraw between 2% and 10% of the starting balance of your income account as a transition to retirement member each financial year.

It’s also important to note that, when you turn 65, you will become a ‘retirement member’ – in other words, your income account will become an ordinary pension account. With this, your minimum drawdown limit will increase, and there will no longer be a maximum limit.

While you cut back at work and dip your toes into retirement, your income account will be working hard to top up your income.

To help you save for your retirement, the Federal Government provides a range of tax concessions.

It’s important to make sure your money is invested to match your needs and lifestyle goals. Learn all about your investment options at Qantas Super.

Whether you’re just starting out in your career, you’re winding down at work, or you’ve already set out on your retirement adventures, there’s never a bad time to seek advice.

Understand your super and the simple steps you can take to stay in control.